Bitcoin & Ethereum Surge as Powell Signals Possible Fed Rate Cut in September

Cryptocurrency markets surged dramatically after Federal Reserve Chair Jerome Powell signaled a potential interest rate cut in September during his Jackson Hole speech. This “dovish” shift sparked speculative buying across risk assets, with Bitcoin and Ethereum leading the charge.

Within moments of Powell’s remarks, Bitcoin shot from roughly $112,000 to as high as $116,000, marking a 3% intraday jump. while Ethereum rallied by nearly 9%, climbing from around $4,300 to over $4,700 CoinLawDecryptCointelegraphThe Economic Times. Several altcoins followed suit: Solana rose around 5%, XRP crossed the $3 threshold, Dogecoin climbed approximately 7%, and BNB and Cardano also posted notable gains CoinLaw. The broader crypto market cap surged past $4 trillion CoinLaw.

Powell’s speech appeared to reflect growing concern over a weakening labor market and persistent inflation, particularly driven by rising tariffs. He hinted that these developments may warrant easing monetary policy, paving the way for a potential rate cut as soon as September. While he stopped short of making an explicit commitment, market expectations shifted dramatically: the odds for a September rate cut shot up from under 70% to between 89% and 91% as traders recalibrated Reuters+1InvestorsThe Times of India.

Stock markets mirrored this optimism. The Dow Jones rallied nearly 900 points to record highs, while the S&P 500 and Nasdaq also surged, supported by plummeting bond yields and a weaker dollar The Times of IndiaAP NewsInvestors+1.

The crypto market’s exuberant response highlights its close correlation with monetary policy and liquidity signals. Lower interest rates typically encourage capital flows into risk assets like cryptocurrencies by easing access to borrowing and investment. As a result, Fed policy shifts tend to move crypto prices sharply DecryptBlockchain News.

Broader Implications

• Trader Sentiment Surge: The spike in rate cut odds emboldened traders across equity and crypto markets, reinforcing a broader risk-on strategy ReutersInvestors.
• Policy Uncertainty Persists: Powell’s comments maintained intentional ambiguity, balancing economic risk with inflation control. While markets reacted positively, analysts caution that the Fed remains data-dependent and not firmly committed ReutersBarchart.com.
• Global Ripple Effects: A potential U.S. rate easing could stimulate broader global markets, lifting risk assets worldwide as borrowing costs fall BenzingaReuters.
• Volatility Ahead: Crypto traders should brace for swings. While the immediate gains are compelling, markets could retrace if future data undercuts easing expectations MarketWatchBarchart.com.